News

ABC store manager charged with embezzling $375,000

By Lightning Reports, Published: September 16, 2024

The manager of a Rutherfordton ABC store pleaded guilty last week to federal charges of embezzling $374,807 from the store, using the money to play the slots at a Kings Mountain casino, Dena J. King, U.S. Attorney for the Western District of North Carolina, announced.

Russel Edward Hester, 72, of Rutherfordton, appeared before U.S. Magistrate Judge W. Carleton Metcalf in Asheville and pleaded guilty to the charges.

According to plea documents filed in court, Hester from December 2021 to October 2023 embezzled the money from the Alcohol Beverage Control Board of Rutherfordton, which manages the ABC store where Hester worked as a manager for nearly 10 years. As store manager, Hester had access to and control over the board’s financial accounts and records, wrote checks to pay bills and was responsible for creating the budget each year, prosecutors said in a news release. Hester was also responsible for providing all the information needed for the annual independent third-party audit of the ABC Store.
According to court records, beginning as early as Dec. 19, 2021, Hester used the ABC board’s debit card to withdraw funds at Catawba Two Kings Casino. Through Oct. 22, 2023, Hester used the store debit card at the casino 192 times to withdraw funds totaling $374,807.10, and used the money to gamble, primarily playing slot machines. On days where Hester used the board’s debit card, he won jackpots totaling $1,469,368.31, and deposited the winnings into his personal bank accounts. On July 4, 2023, for instance, Hester used the ABC board debit card to withdraw $3,000 at the casino. Hester then placed the money into a slot machine and won a jackpot of $18,350. Hester elected to have this jackpot issued in the form of a check, which he deposited into a bank account under his control.
Plea documents also show that Hester took steps to cover up the embezzlement. For example, during the Board’s 2023 annual independent audit, Hester provided multiple altered and falsified bank statements to the auditor. In furtherance of the fraud, Hester removed transactions from the casino, added fabricated transactions and falsified bank account balances on the statements before providing them to the auditor.

Hester pleaded guilty to wire fraud and money laundering and was released on bond. At sentencing, Hester faces up to 20 years in prison for the wire fraud charge and 10 years in prison for the money laundering charge. A federal district court judge will determine Hester’s sentence after considering the U.S. sentencing guidelines and other statutory factors. A sentencing date has not been set.
Donald “Trey” Eakins, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, Charlotte Field Office; Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte; and Rutherfordton Police Chief Clint Ingle joined U.S. Attorney King in announcing the guilty plea.

King commended IRS-CI, USPIS and the Rutherfordton Police Department for their investigation of the case and thanked the Rutherford County District Attorney’s Office for its invaluable assistance. Assistant U.S. Attorney Alex M. Scott of the U.S. Attorney’s Office in Asheville is prosecuting the case.